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CONTRACT LIFECYLE - 1st STAGE CONTRACTS ARE FORMED 2nd & 3rd ELEMENT…
CONTRACT LIFECYLE - 1st STAGE CONTRACTS ARE FORMED
2nd & 3rd ELEMENT OF A CONTRACT
2. INTENTION TO CREATE LEGAL RELATIONS
Court applies objective test to determine - reasonable person test
2 presumptions based on argument type
Social or domestic agreement = NO INTENTION
:lock: Balfour v Balfour - no contract as spouses so domestic agreement
:lock: Meritt v Meritt - yes contract cuz agreement made bet spouses after legally separated
:lock: Todd v Nicol - yes contract even tho domestic cuz of "cost & convenience encountered"
:lock: Ashton v Pratt - no contract as NO INTENTION cuz of "clarity of language used" and absence of attention to details so unlikely to be of contractual
Commercial agreements = YES INTENTION
:lock: Malago v AW Ellis Engineering - yes contract as agreement was binding as clearly stated in Heads of Agreement
:lock: Banque Brussels v Australian National Industries - yes contract as letter of comfort clearly indicated agreement WITH INTENTION
:lock: Rose & Frank v JR Crompton & Bros - no contract as agreement no legally binding which was clearly indicated from honour clause
:lock: Jones v Vermon's Pools - no contract as honour clause indicated agreement NOT INTENDED to give rise to leg.bind.contr
As line bet social & commercial agreements can be blurry, we consider:
Clarity of terms
Cost & inconvenience
True flavour of agreement
Promises made by GOV
:red_cross: policy proposals during elections - NO INTENTION
:check: govs entering into commercial contracts - YES INTENTION
3. CONSIDERATION
5 legal rules to tell if we have good consideration
3&4. executed or executory - good consid but past consid - not good consid
(:lock: Roscorla v Thomas)
rare exception to past consid - if 3 criteria are met (:lock: Pao On v Lau Yiu Long)
there's understanding of remuneration by benefit or payment
payment must have been leaglly enforceable if had been promised in advance in usual circums
act done at promisor's request
Consid must not be illusory or uncertain
:lock: White v Bluett - stopping complaining is intangible and not consid
Performing an existing obligation (under law or existing contract) is not good consid
:lock: Stilk v Myrick - no good consid given for promise of extra money only performed usual oblig - under contract
:lock: Glasbrook v Glamorgan CC - yes good consid given as did more than usual duty - at law
:lock: Williams v Roffey Bros - actually only had performed oblig so shouldnt be enforceable, BUT Court said EXCEPTION of "Practical Benefit Test" which "applies only when theres no duress"
another EXCEPTION is DEEDS - form of consid shown by use of formal legal doc (contract under seal) - so its enforceable even tho no actual consid is given
Consid must be sufficient consid need not be adequate
:lock: Thomas v Thomas - Yes agreement enforceable as consid given need not be adequate only sufficient